What Does A Radio Advertising Campaign Cost?

What Does A Radio Advertising Campaign Cost?

Every good marketer knows you need a clear target – and specific, measurable
goals – to craft an effective advertising message and manage an accountable
media buy.

The same holds
true in budgeting a first-time radio campaign.
Risks must be minimized and care taken not to underspend or
overspend. An underfunded campaign could
pull the plug days before that magic fourth or fifth advertising impression is
made to motivate listeners to take action.
And an overfunded campaign could waste thousands or millions, chasing
sales that might not ever be realized.

So what’s the
magic number? Let’s start with the easy
part: Creative & Production. Some radio stations give away these services
for free. And short of warning “you get
what you pay for,” just know that your best, most effective creative may not
come from an in-house production team grinding out dozens of commercials every
week for a full staff of sales reps.
When I was 23 years old, I worked for a top-rated AM/FM combo in a Top Five
market, writing and producing hundreds of commercials for products and services
I knew nothing about, using the same station voices to play “credible expert”
and “guy/gal next door” on spot after spot after spot. At the other extreme, some agencies and
producers charge $10,000 and up for a single commercial. And a full-blown original music jingle or
celebrity voice talent could cost you many times that. For middle-ground perspective, I’ll tell you
that The Radio Agency charges $5,500 for a round of creative, which includes
the talents and services of five, professional radio copywriters (for multiple
styles and perspectives), script editors, voice talent, studio time, talent direction,
producer, audio editing, music and sound effects licensing and mastering
alternate versions if unique numbers, URLs or promo codes are being used to
track response.

Answering the
budget question gets a bit trickier on the Media side. The more advertising impressions you buy, the
higher the cost of media. So a campaign
in Portland, Maine will cost far less than a campaign in Portland, Oregon, a
city with nearly 10 times the population.
A good place to start is determining which radio advertising platforms
make the most sense for you.

AM/FM, despite
slowly-eroding listener share, is still the 800 lb. gorilla in the broadcast
booth. AM/FM is a must for local
campaigns and national networks and syndicated shows can generate massive reach. SiriusXM is a “must
consider” for national campaigns, especially for B2B advertisers or a target
audience of 35+ plus (the dominant audience for SXM’s spoken word channels
which accept advertising). But because
SiriusXM is a one-satellite-to-48-states (plus the lower tier of Canada)
delivery system, SXM makes no sense for a local campaign. The same holds true for Podcasts. While there are some local
podcasts and national podcast properties that can be purchased in a single
market, virtually all podcast advertising is placed to reach a national
audience. Finally, Streaming Audio (notably Pandora
and Spotify) can be a healthy part of a local or national buy, especially if
you wish to target just one gender or a very specific age range. For example, a Women 25-49 buy can be placed
without wasting a single advertising impression on Men – or Women under 25 or
over 49.

Plan for a minimum four-week campaign, to enable a two-week test of different creative messages. For example, airing two weeks of authoritarian, straight-read announcer versus two weeks of the guy/gal next door giving friendly advice, will likely reveal that one approach works better than the other, allowing you to optimize your creative efficiency going forward.

For a national campaign, plan on $50,000 to $150,000 to cover a 4-6 week media campaign. This allows you to buy 4-6 different types of media and test two different messages, meaning that you’re actually running 8-12 “mini tests” rather than just one test of radio. If just one of those mini tests works, your successful media buy is scale-able, coast to coast.

Locally, a four-week buy in Portland, Maine might cost $10,600…while a four-week buy in Portland, Oregon might cost $36,400. In a major market like Chicago, that same audience penetration might require $120,600. (These are ballpark costs, projected against Adults 25-54, 200 GRPs over four weeks. Let us know your target audience and markets and we’ll provide you with a reliable estimate.)

Budget at least $10,000/week for a SiriusXM buy, to take advantage of the added value exposure they offer. For Podcasts, test the low end ($300-$1,000 per show), midrange ($1,000-$5,000) and upper end ($5,000+) properties that match up with your target audience. For Streaming Audio, budget a minimum of $15K-$35K to leverage the best opportunities in digital audio streaming.

Here at The
Radio Agency, we subscribe to Nielsen Audio Research for all 265 U.S. radio
markets, as well as proprietary research and planning tools that enable us to
assemble intelligent and reliable planning estimates for any type of radio
buy. Please don’t hesitate to get in
touch, if we can help you make a better informed decision on the best ways to
leverage the marketing assets of radio to help your brand succeed on radio.

CEO & Creative Director of The Radio Agency, a national
advertising agency 100% focused on creating and managing sound advertising
campaigns through the medium of radio. You can reach Mark at Mark@TheRadioAgency.com.